The power of vanilla options lies in their versatility. They allow a trader to adapt or adjust his positions in the financial markets according to the current situation.
Binary options have the advantage of reducing the emotional aspect of trading and being easy to understand. However, they can appear to be nothing more than basic, highly speculative bets.
Options are complex derivative instruments, some options trading strategies may be conservative while others may be speculative in nature, with a substantial risk of loss.
Whether they are used to hedge foreign exchange risks or to speculate, most multinationals and trading professionals use options in one shape or another.
The following sections present the basic principles of binary and vanilla options trading. Keep in mind that most options traders have many years of experience, you cannot become an expert immediately after reading these articles.